Revenues were up 70% to $434.7 million in the six months ended December 31, compared to the same period a year earlier, and the after-tax profit did even better, up 150% to $98.47m from $39.38m earlier.
The earnings gain was based on higher margins from the product mix being sold, chief executive Geoff Babidge said.
Revenue from the group’s flagship product, A2 Platinum infant formula, was $341m, 78% of the total.
Extremely strong growth was still being achieved for A2 Platinum in Australia and China with good growth in fresh milk sales in the United States and in the smaller United Kingdom business, Babidge said.
With expansion into the northeast of the United States, the group would grow to a presence in 5000 stores in that country, up from 3600 at balance date.
China and the US were the key growth markets along with the core Australian business.
The consumption market share held by A2 Platinum in China had lifted significantly, from 3.5% for the three-months to the end of June, to 5.4% for the three-months to the end of December, based on independent surveys.
The half-year after-tax earnings exceeded the $90.6m figure for the full June 2017 year.
Operating cashflow jumped out to $116.4m for the period, up from $38m.
At balance date, the company had $240m in cash on hand and was still considering an on-market share buyback and paying dividends.
The growth in cashflow came despite a $10m increase in marketing spend during the half-year and a $25m lift in A2 Platinum inventory levels from manufacturer Synlait Milk to allow for the new regulatory regime in China and increased sales growth, Babidge said.
Inventories totalled $53.6m at balance date.
A2 Milk Co finished the period with $547m in assets, up from $344m and had an equity ratio of 71% with no borrowings.
The A2 Platinum supply arrangement with Synlait Milk in Canterbury was working very well, he said.
The deal with Fonterra is for new products and new markets.
The strong sales growth is expected to continue through the second half of the year and the increase in market spend is likely to be $35m to $40m half-on-half, given the timing and scope of the sales programme.
Australian revenues have fuelled A2’s growth into other markets, initially with Australian-supplied Fresh Milk and in recent years the A2 Platinum success.
Australian sales jumped 47% to $304.3m in the latest half and Ebitda operating earnings by 65% to $116.4m.
Some of the Synlait-supplied infant formula sold to Australia is then moved into China in what is called the Daigou or grey channel but the amounts involved in aren’t known.
A2 Platinum is the fastest-growing infant formula in Australia, with a market share of up to 30% in mainstream retailers.
Fresh Milk remains very important in Australia, with A2’s product growing sales by 3% during the half and having a grocery-trade market share up slightly at 9.5%.
The Australian fresh milk is also shipped to China and sales into Singapore have started recently.
Direct sales of all products by A2 into China recorded exceptional growth, Babidge said.
Direct sales jumped 204% to $114.4m, and Ebitda by 252% to $48.3m.
The group also plans new products for the US market, in addition to the existing fresh milk business.
While smaller than the other markets fresh milk sales in the UK increased by 50% in the half-year, Babidge said.
